1. A lease to the government for a term of years, made without
specific authority of law, under an appropriation for but one
fiscal year, is binding on the government only for that year.
Rev.Stats. § 3732; § 3679, as amended February 27, 1906. P.
271 U. S.
206.
2. To make such a lease binding for any subsequent year, it is
necessary not only that an appropriation be made available for the
payment of the rent, but that the government, by its duly
authorized officers, affirmatively continue the lease for such
subsequent year, thereby in effect, by the adoption of the original
lease, making a new lease under the authority of such appropriation
for the subsequent year. P.
271 U. S.
207.
59 Ct.Cls. 907 affirmed.
Appeal from a Judgment of the Court of Claims dismissing, on
demurrer, a petition to recover rentals under leases to the United
States.
Page 271 U. S. 205
MR. JUSTICE SANFORD delivered the opinion of the Court.
This action was brought by the trustees of the Levi Z. Leiter
estate, under the Tucker Act, [
Footnote 1] to recover rentals under four leases to the
United States. The petition was dismissed on demurrer for failure
to state a cause of action. 59 Ct.Cls. 907. The appeal was taken in
January, 1925.
The leases, which were for space in an office building, were
made by the trustees and the Treasury Department, in 1920 and 1921,
for terms of four and five years for the use of the Bureau of War
Risk Insurance and other Federal agencies that were subsequently
merged, in August, 1921, in the Veterans' Bureau. [
Footnote 2] The leases provided for
stipulated annual rentals, to be paid in monthly installments. At
the time they were made, however, there were no appropriations
available for the payment of the rent after the first fiscal year
during the term of each lease, and each provided that the term of
occupancy should extend to June 30, 1925 "contingent upon" the
making available by Congress of appropriations out of which the
rent might be paid after the current fiscal year, and that, if such
appropriation was not made for any fiscal year, the lease should
terminate as of June 30 of the year for which an appropriation was
last available.
On May 29, 1922 -- before any appropriation had been made out of
which the rent could be paid for the next fiscal year -- the
Director of the Veterans' Bureau gave written notice to the
trustees that the premises described in the leases would be
"vacated, relinquished, and returned" to them on June 30. On June
1, the trustees wrote to the bureau denying the right of the
government to terminate the leases and stating that the
surrender
Page 271 U. S. 206
would not be accepted, and claim would be made against the
government for their full period, whether the premises were
occupied or not. By an Act of June 12, 1922, [
Footnote 3] a lump sum appropriation was made for
the expenses of the Bureau, including rentals, for the next fiscal
year, commencing July 1. On June 30, however, the Bureau vacated
the premises in accordance with its previous notice. All rentals
due to and including that date were duly paid. Thereafter, the
trustees, being unable to release the premises, presented to the
Bureau bills for the rentals for July and succeeding months, the
payment of which was refused, and these claims were also disallowed
by the Comptroller General. The trustees thereafter instituted the
present action to recover the rent claimed to be due from July 1,
1922 to June 30, 1923, inclusive.
We are of opinion that the demurrer to the petition was rightly
sustained.
Section 3732 of the Revised Statutes provides, with certain
exceptions not here material, that:
"No contract or purchase on behalf of the United States shall be
made, unless the same is authorized by law or is under an
appropriation adequate to its fulfillment. . . ."
And § 3679 of the Revised Statutes, as amended by the Act of
February 27, 1906, c. 510, [
Footnote 4] § 3, provides that:
"No Executive Department or other government establishment of
the United States shall expend, in any one fiscal year, any sum in
excess of appropriations made by Congress for that fiscal year, or
involve the government in any contract or other obligation for the
future payment of money in excess of such appropriations unless
such contract or obligation is authorized by law."
It is not alleged or claimed that these leases were made under
any specific authority of law. And since, at the
Page 271 U. S. 207
time they were made, there was no appropriation available for
the payment or rent after the first fiscal year, it is clear that,
insofar as their terms extended beyond that year, they were in
violation of the express provisions of the Revised Statutes, and,
being to that extent executed without authority of law, they
created no binding obligation against the United States after the
first year.
See Chase v. United States, 155 U.
S. 489,
155 U. S.
502-503;
Sutton v. United States, 256 U.
S. 575,
256 U. S. 579;
United States v. Doullut, 213 F. 729, 737, and
Abbott
v. United States, 66 F. 447, 448. A lease to the government
for a term of years, when entered into under an appropriation
available for but one fiscal year, is binding on the government
only for that year.
McCollum v. United States, 17 Ct.Cls.
92, 104;
Smoot v. United States, 38 Ct.Cls. 418, 427. And
it is plain that, to make it binding for any subsequent year, it is
necessary not only that an appropriation be made available for the
payment of the rent, but that the government, by its duly
authorized officers, affirmatively continue the lease for such
subsequent year, thereby in effect, by the adoption of the original
lease, making a new lease under the authority of such appropriation
for the subsequent year. This conclusion is in entire accord with
Bradley v. United States, 98 U. S.
104,
98 U. S.
114-115. There, a building having been leased to the
Post Office Department for three years at a stipulated annual
rental of $4,200, subject to an appropriation by Congress for
payment of the rental, and Congress, before the expiration of the
second year, having made a specific appropriation of $1,800 only
for the payment of rent for the third year, and the Department
having continued to occupy the building for the third year, it was
held the lessor could recover only the amount thus specifically
appropriated for the occupancy of the building during the third
year, and not the full amount of the rent stipulated in the
lease.
Page 271 U. S. 208
In the present case, in accordance with the notice of the
Veterans' Bureau that it would surrender the premises on June 30,
1922, the government did not occupy the premises after that date.
That is, although a lump sum appropriation had meanwhile been made
for the rental expenses of the Veterans' Bureau for the next fiscal
year -- in which no reference was made to these specific leases --
the leases were not continued under this appropriation for the next
year, either by a specific agreement to that effect or by the
occupation of the premises. So the government did not become liable
for the payment of rent after the surrender of the premises.
The judgment of the Court of Claims is
Affirmed.
[
Footnote 1]
24 Stat. 505, c. 359; Judicial Code, § 145.
[
Footnote 2]
Act Aug. 9, 1921, c. 57, 42 Stat. 147.
[
Footnote 3]
42 Stat. 635, 648, c. 218.
[
Footnote 4]
34 Stat. 27, 48.